• Bloomberg reported that China plans to accelerate purchases of American farm goods to comply with Phase One of the trade deal with the US following talks in Hawaii last week. China intends to increase purchases of everything from soybean to corn and ethanol after purchases fell behind due to the coronavirus. A source said that China’s government has asked state-owned buyers to make efforts to meet Phase One obligations. China purchased only US$4.65bil worth of US farm goods in 4M2020, meeting only 13% of its commitment of US$36.5bil.

• In a related development, Bloomberg cited Cargill’s Brazil CEO as saying that prices will determine China’s soybean purchases. He said that Brazil’s soybean exports will start slowing in September following a normal trend as US shipments become more competitive. In spite of this, Brazil’s export volumes are still expected to be good, with commitments through October and November 2020.

• Platts cited USDA (US Department of Agriculture) as saying that the current wet weather in the MidWest could benefit US soybeans in the coming days. The Mid-West, which produces over 90% of US soybeans, had been reeling from dry weather a couple of weeks ago. However, recent wet weather should boost soybean emergence and aid crop conditions. So far, 81% of the planted soybeans have emerged compared with 49% a year ago and the fiveyear average of 75%. US farmers have planted 93% of the intended soybean areas of 83.5mil acres for the 2020E/2021F season vs. 72% last year and the five-year average of 88%.

• The Edge Markets quoted Malaysia’s Plantation Industries and Commodities Minister as saying that India intends to import palm oil from Malaysia as it seeks to fulfil 25mil tonnes of vegetable oils for domestic use. This was communicated to the Minister by the state of Telangana’s Minister of Agriculture. Telangana is seeking help from Malaysia via the transfer of technology in the areas of palm oil plantation management, palm oil processing and ecosystem of the industry.

• Reuters reported that the US Environmental Protection Agency has received 52 new petitions for retroactive biofuel blending waivers that if granted, would help bring oil refiners into compliance with a court ruling. The new pending applications for blending exemptions arefor compliance years 2011 to 2018. The waivers exempt oil refiners from biofuel blending. Biofuel advocates says that the waivers hurt demand for corn ethanol while the oil industry says that the obligations are too pricey.

Source: AmInvest Research - 29 Jun 2020